When we think about energy independence here in the US we generally imagine that we will have all sorts of solar and wind facilities and we will no longer have to rely on the usual sources of energy.
Specifically; oil, coal, natural gas, or nuclear.
The Utopian idea of 100% Green Energy has been bandied about for decades and has not yet panned out into anything significant for our nation as a whole, and we are still at the “mercy” of the “older” fuel resources. My question is this; why is that perceived to be a bad thing?
With all of the technological advances we have made in obtaining more oil, clean coal technology, enormous natural gas reserves, and yes, even well regulated nuclear power, why are we still in the hoping phase of those “green” fuel resources which have been shown time and again to be limited in scope, even if they are clearly desirable?
Obviously the time has not arrived where the green technologies, whatever they are and even combined all at once, can replace the energy needs of our nation.
I will state clearly that I do believe at some point we will be able to harness enough energy from the “green” sources to eventually replace what we need today, but that time has not come and it could be decades until we reach that point. We absolutely should continue this quest, create jobs along with it, and hopefully more and more major corporations will pour money into research and development.
The fact of the matter is that we have enormous supplies of the “usual” resources that are readily available, attainable, and can be regulated to assist in our environmental efforts for a cleaner and safer world.
Oil is still in abundant supply and with new technology can be obtained by unique methods of extraction with much less harm to the environment. Natural gas is all over the US, and is awaiting the desire to swing into major usage. Clean coal technology has lifted that resource from the depths of our old way of thinking about coal and pollution, and the world will require vast amounts of this cheaper fuel as emerging markets and growing nations continue to build their own infrastructures. Nuclear energy has always been a “renewable” source of energy supply and with better regulations and tighter standards, we can overcome the fears associated with nuclear. We did not give up flying when the first fatal crash occurred (or 100th), nor did we giving up sea-going when the Titanic went down. There is no reason to abandon nuclear energy if we set our minds to developing the technology to make it safer than it already is.
All of these energy supplies are available right here in our own backyards, within our borders, and under our control. I believe that the US will become self reliant sooner than later with these energy supplies. We could also become major suppliers to the worlds’ energy needs as well.
I believe that we could render the current sources of our imported fuels as secondary, and take over the lead, as we should, for the rest of the world.
As Investors, How Can We Profit
The major companies with cash reserves, well managed research and development departments, that have the fortitude and willingness to spread their long reach into each and all areas of energy supply will create this new reality.
I believe that the following companies are ready to lead the way:
ExxonMobil XOM Price: $85.22/share, Dividend Yield: 2.30%, ESS Rating- Bullish
Chevron CVX Price: $107.50/share, Dividend Yield: 3.00%, ESS Rating- Bullish
ConocoPhillips COP Price: $72.43/share, Dividend Yield: 3.70%, ESS Rating- Bullish
Arch Coal ACI Price: $14.82/share, Dividend Yield: 3.00%, ESS Rating: Bullish
Alpha Natural Resources ANR Price: $20.73/share, Dividend Yield: N/A, ESS Rating: Neutral
Peabody Energy BTU Price: $34.23/share, Dividend Yield: 1.00%, ESS Rating: Bullish
Cameco Corp CCJ Price: $17.96/share, Dividend Yield: 2.30%, ESS Rating: Bullish
Hitachi, LTD HIT Price: $52.41/share, Dividend Yield: 1.40%, ESS Rating: Very Bullish
General Electric GE Price: $18.23/share, Dividend Yield: 3.80%, ESS Rating: Bullish
The Ties That Bind
Each of these major corporations are very much the same yet very different. They each have very deep pockets, great balance sheets, enormous reach within the energy and fuel sector, and the desire and ability to expand on what they currently have into all other areas of this business.
Each has shown a unique capability to grow internally as well as externally and to reinvest in their core businesses.
They are different in that they are major players in different parts of the energy world right now, but at any given moment they can (and will in my opinion) deploy major resources into any area of energy that makes sense within their own unique business models, and they are ALL successful.
By creating a basket of Energy/Fuel related stocks, I believe that savvy investors can capitalize on the huge growth that this industry has in front of it.
It is said that “financials” lead the market out of downturns. I believe that Energy and all of its moving parts will lead our nation out of recession, provide more job opportunities, offer great technological advances, and offer us an opportunity to profit from it all.
*Please do your own research before buying or selling any security. This article is not a recommendation to buy or sell any stock mentioned and is strictly the opinion of the author.
Disclosure: I am long XOM, GE.
Additional disclosure: I will be adding several more prior to the end of the year.